Sunday, April 17, 2016

Airasia: Harder for founders to get private placements through?

Boo!!! So Tony Fernandes and partner did a dare and announced a placement to themselves and the minorities bought it. Now we think the shares of Airasia is not RM1.84 but higher. (You see investment besides fundamentals is a perception game in the short run)

It is a voting machine in the short run, but a weighing machine in the long run. (Airasia had that moment in the last 1 year, where it started with GMT)

Despite Bursa approving the placement, will it get pass the minorities hands? At today's price of RM2.13, it is after all 16.1% [(RM2.09-1.80)/RM1.80 - after dividend] premium over the price they supposed to purchase at - RM1.80.

The founders will not be able to vote and Airasia has a largely huge free float. Will all these shareholders vote for the placements - which I think needs a minimum >50% approval?

Now it seems a rights is a fairer option - but not necessarily a preferred option for the founders and short term shareholders.

Disclaimer

The content here should serve as the opinion of the writer rather than as an advice to buy or sell. You should do your own research and/or seek expert's advice when doing your investments. Any decision that you made is your own and the author should not be held accountable.